Wednesday, May 27, 2009

Truck tonnage decreased 13.2% in April compared with a year ago, falling to the lowest level in seven-and-a-half years, American Trucking Associations said.

The decline in the for-hire seasonally adjusted truck tonnage index was the biggest in 13 years and left tonnage at a reading of 99.2, its lowest level since November 2001.

The index fell 2.2% from March, the second consecutive month-to-month decrease, ATA said late Tuesday.

Without accounting for seasonal adjustment, the index fell 2.9% from March, while March’s tonnage level had dropped 12.2% from a year earlier.

ATA Chief Economist Bob Costello said trucking is being hit by both the recession and businesses’ efforts to decrease inventory.

“While most key economic indictors are decreasing at a slower rate, the year-over-year contractions in truck tonnage accelerated because businesses are right-sizing their inventories, which means fewer truck shipments,” Costello said.

“Until this correction is complete, freight will be tough for motor carriers,” he said in a statement.

ATA calculates the tonnage each month based on reports by its member trucking companies.

Sunday, May 24, 2009

TOKYO (Reuters) - Honda Motor Co's earnings will hit bottom this year and improve beyond that as demand in the United States returns in the second half, the Japanese automaker's chief executive said on Friday.

"The last (January-March) quarter was the nadir, and things will gradually start to improve in the first two quarters (of this year)," Takeo Fukui told Reuters in an interview.

"I'm definitely expecting the second half to turn up, and on an annual basis I think this year will be the floor."

Battered by a sales slump in the United States, its biggest market, Japan's No.2 automaker lost a net 186 billion yen ($1.95 billion) in the fourth quarter of 2008/09, a reversal from a profit of 25.4 billion yen a year earlier. For the year to March 2010, Honda has forecast a 71 percent drop in net profit to 40 billion yen.

A key element in the earnings deterioration across the industry in the past year has been a double-digit sales slide in the United States, which lost its claim to being the world's biggest auto market to China this year. But Fukui said he believed the U.S. market had also reached a bottom, projecting a recovery in the latter half of 2009.

"A 10 million-unit (a year) market is abnormal for the United States," he said. "I think there's latent demand for 13 to 14 million units annually, and we'll get back to that level at some point."

One worry was the possible disruption if Chrysler, which filed for bankruptcy protection last month, dumped its cars on to the market from its inventory, Fukui said.

While Fukui said he hoped that Chrysler's bigger rival, General Motors Corp, would avoid Chapter 11, he said Honda -- and probably the rest of the industry -- was making necessary preparations for the possibility.

"You can't just assume that it won't happen and hope for the best," he said.

QUALITY-RELATED COSTS DOWN

Honda was the only top Japanese carmaker to stay in the black last year as Toyota Motor Corp and Nissan Motor Co lost money, and executives have cited its profitable and world-leading motorcycle business as a major boost.

But Fukui said another factor that gets little mention was the vast drop in warranty and other costs last year after a lengthy process of fixing quality issues finally began to bear fruit.

"The initiative started during my predecessor's tenure and it's been a long and painstaking process. We finally saw the results of that last year," said Fukui, who will step down as CEO next month after six years at the helm.

IATA predicts passenger traffic in 2009 will fall for the first time since 2001

The International Air Transport Association says airlines will make losses of $4.7bn (£3.2bn) in 2009, 88% more than the body's initial forecast.

In December, Iata said the global air transport industry would make a loss of $2.5bn this year.

Iata said passenger demand had deteriorated more than expected and demand for air cargo was even weaker.

However, the body said that the industry's prospects might begin to improve by the end of the year.

The international airline industry lost $8.5bn last year, more than its initial estimate of $5bn, as the final three months of 2008 saw a sharp fall in first-class and business-class passengers and cargo traffic.

The new projection comes as passenger traffic is expected to slide by 5.7% over the year.

REGIONAL BREAKDOWN

Europe - $1bn loss

Asia-Pacific - $1.7bn loss

North America - $100m profit

Latin America - $600m loss

Africa - $600m loss

Middle East - $900m loss

Source: Iata

Industry revenues are forecast to fall by 12% to $62bn, worse than the 7% fall in the wake of the 11 September 2001 attacks on the US.

"The state of the airline industry today is grim," said Iata director general Giovanni Bisignani.

"Demand has deteriorated much more rapidly with the economic slowdown than could have been anticipated even a few months ago."

Airlines in Europe and Asia will be particularly hard hit, with North American airlines expected to fare better.

"We used to see Asia as the star, but unfortunately China, India and Japan have big problems," Mr Bisignani told the BBC's World Business Report.

However, it said that low fuel prices were the one piece of good news for the industry.

It expected oil to average $50 a barrel in 2009, down from $99 in 2008.

Mr Bisignani said that there was little to suggest an early end to the downturn.

"While prospects may improve towards the end of the year, expecting a significant recovery in 2010 would require more optimism than realism," he said.

Friday, 22 May 2009 13:06 UK BBC

The Emirates group, the largest airline in the Middle East, has reported a fall in profits of 72% for the 2008/09 fiscal year.

The group, like many others around the world, has been hit hard by the global slowdown and high fuel prices.

Its profit of 1.49bn dirhams ($406m; £255m) for the year to March 31 compared with a 5.3bn dirham profit for the previous year.

Also on Friday, British Airways reported a record loss of £401m.

Rising sales - thanks partly to the addition of new routes - and lower costs helped it remain in profit, Emirates group, which includes the Emirates airline as well as Dnata, an airport operations company, and other businesses.

Total group revenue was 46.249bn dirham, a 10.4% increase on the previous year.

"No one could have predicted the scale of the worldwide recession which is now impacting every country on earth," Sheik Ahmed bin Saeed Al Maktoum, the company's chairman and chief executive said in a statement.

"Emirates has worked hard to cope with this downturn by maintaining our agility and responsiveness in a volatile economic environment," he added.

"Although fuel prices are dropping, demand for business and first class traffic is still weak in many markets," he said.

Emirates is the largest customer for the Airbus A380, with 58 aircraft orders.

It expects to receive 18 planes from Boeing and Airbus in the coming year.

British Airways has announced the biggest loss since the company was privatised in 1987.

BA reported a loss before tax of £401m for the year to 31 March, after seeing its results hit by a weak pound and higher fuel costs.

The airline made a revised profit of £922m in the previous year.

BA also offered staff the option of taking unpaid leave or working part-time. Chief executive Willie Walsh said he would work for no pay in July.

Mr Walsh said: "I certainly want to make a contribution in recognition of the extremely challenging position we face. This is no stunt. I do not easily give up anything I have earned."

Mr Walsh earns £735,000 a year.

Finance director Keith Williams, who is paid £440,000, will also forgo his pay for the month of July.

Fuel pressures

Although revenues increased to almost £9bn, BA faced a near-£3bn fuel bill.

Mr Walsh said he saw "no signs of recovery anywhere".

It's difficult to avoid the impression that at least part of BA's agony, its descent in just 12 months from record profits to record losses, was of its own making

Robert Peston, BBC business editor

Fuel costs rose 44.5% after the price of oil soared last year. The weaker pound also contributed to rising costs as fuel is bought in US dollars.

But the airline said it expected lower fuel prices to reduce its fuel costs by about £400m in the year ahead.

The results also included redundancy-related costs of £78m.

BA said it had cut more than 2,500 jobs since last summer and added that it was in talks with unions about "pay and productivity changes".

'Self-inflicted wounds'

Despite BA's claims that it has been a victim of a downturn in global conditions, analysts say the airline is not entirely blameless for its poor results.

Tom Symonds, BBC transport correspondent

One of BA's biggest problems is the drop in numbers by 13% of the airline's real earners - the business passengers.

The airline is doing all it can to keep them flying, including in recent months a Buy One Get One Free offer.

It is much harder for BA to take on the likes of easyJet and Ryanair when it comes to offering cheap economy seats. And easyJet in particular is deliberately punting for business passengers forced to travel on a budget.

The other big problem is an old one. BA's fuel bills have soared by 44.5% in the last year.

The real problem is that the world's airlines buy their fuel in dollars, and the exchange rate against the pound is not good for BA.